Commercial and Tribal Gaming Post Record Revenue Despite Industry Warnings Over Prediction Markets

The U.S. gaming industry is posting record revenue even as trade groups, regulators and tribal organizations intensify warnings that prediction markets threaten sportsbooks, tribal gaming and state tax revenues.

New reports released over the past week by the American Gaming Association (AGA) and the National Indian Gaming Commission (NIGC) show that commercial and tribal gaming revenue both reached record levels.

While the latest revenue reports do not establish whether prediction markets have diverted betting activity from regulated sportsbooks, they also do not yet indicate the broad industry-wide revenue decline that many opponents have warned could result from exchanges’ increasing popularity.

The figures, though, do not disprove the industry’s concerns, many of which focus on long-term market structure rather than short-term revenue performance.

Industry Intensifies Fight Against Prediction Markets

Opposition to sports event contracts has accelerated significantly throughout 2026.

The AGA has emerged as one of this sector’s most vocal critics.

The group has urged Congress, courts and federal regulators to clarify that sports event contracts fall outside the scope of the Commodity Exchange Act. The AGA has argued that prediction markets allow operators to offer sports betting nationwide without obtaining state gaming licenses, paying state gaming taxes, or implementing customer protection measures.

Earlier this year, the trade group also launched a public tracker estimating the amount of state gaming tax revenue it believes has been lost since prediction markets began offering sports event contracts. As of publication, the association estimates that figure exceeds $1.21 billion.

Tribal gaming organizations have also raised alarms against prediction markets. Multiple tribes and tribal organizations have filed lawsuits against operators, such as Kalshi.

They’ve argued that sports event contracts violate tribal exclusivity agreements established under the Indian Gaming Regulatory Act (IGRA). Some tribes have urged Congress and the Commodity Futures Trading Commission (CFTC) to intervene before the market expands further.

The legal battles between prediction market operators and state regulators have spread across numerous jurisdictions. States including Nevada, New Jersey, Maryland, Washington, Minnesota, New York and New Mexico have challenged operators through litigation or enforcement actions. Both the AGA and tribal groups have joined or attempted to join several lawsuits.

At the same time, Congress has also begun examining sports event contracts through committee hearings and over two dozen bills.

Revenue Reports Continue Showing Growth

Despite those concerns, the latest revenue data continue to point to an expanding regulated gaming industry.

The AGA’s latest Commercial Gaming Revenue Tracker report shows that U.S. commercial gaming generated a record $7.06 billion in revenue during May. The figure represented a 4.6% increase from a year earlier. Through the first five months of 2026, commercial gaming revenue reached $34.0 billion, representing 6.4% year-over-year growth.

Sports betting, which the AGA argues is most directly affected by sports-event contracts, recorded mixed results. May revenue declined 1.8% year over year, which the AGA partially attributed to the growth of prediction markets. However, sports betting revenue for January through May grew 8.5% compared with the same period in 2025.

The tribal sector reported similar momentum.

The NIGC reported record FY2025 gross gaming revenue of $46.2 billion. That represented an increase of 5.3% over FY2024 and the highest annual total in the history of Indian gaming. The report does not show separate figures for sports betting.

Seven of the agency’s eight regions recorded year-over-year revenue growth, with only the Rapid City region (the smallest region) posting a slight decline.

Pennsylvania Reflects Broader Growth Trend

Recent results from Pennsylvania, which is one of the country’s largest regulated online gambling markets, also point toward continued expansion.

Last week, the Pennsylvania Gaming Control Board released its fiscal year report, which showed that combined iGaming and sports betting revenue surpassed casino slot machine and table game revenue for the first time.

The report showed that sports betting revenue rose 35.9% year over year to $662.90 million, even though total handle declined modestly. Out of the 17 commercial casinos, only two reported a decline in revenue for the year.

World Cup Highlights Continued Sports Betting Demand

World Cup betting activity also points to continued consumer demand for regulated sportsbooks.

DraftKings said the FIFA World Cup Final became the most bet-on soccer match in the company’s sportsbook history, attracting more than 2 million bets. Total bets on the tournament increased 650% compared with the 2022 World Cup.

The company said that DraftKings ‘ Spanish-language experience saw a 250% increase in active soccer customers during the World Cup.

Industry-wide activity reflected a similar trend. GeoComply, which provides geolocation services to many regulated U.S. sportsbooks, reported record betting activity throughout the tournament. That includes 160.6 million geolocation checks during the opening week.

The World Cup Final saw 14.7 million location checks, nearly double the 7.9 million during the 2022 final.

Prediction markets also gained significant traction during the tournament, illustrating why the industry continues to view them as an emerging competitive threat.

A recent Macquarie report estimated that prediction markets generated more than $50 billion in trading volume in June, driven by the World Cup. Meanwhile, H2 Gambling Capital estimated that prediction markets accounted for approximately 27% of comparable U.S. sports betting activity during the World Cup, up from about 9% at the beginning of the year.

Bloomberg reported that much of that growth came from states where traditional online sports betting remains illegal. That allows prediction markets to reach customers who otherwise would not have access to licensed sportsbooks.

That dynamic could still affect tribal gaming interests in states such as Florida, where the Seminole Tribe holds exclusive rights to online sports betting.

Revenue Data Has Limits

The latest figures do not rule out an impact from prediction markets on regulated gaming, particularly sports betting.

While prediction markets have expanded rapidly, revenue reports alone cannot determine how much betting activity, if any, has shifted from licensed sportsbooks to federally regulated event contracts.

It’s important to distinguish between trading volume and revenue. Trading volume measures the total value of contracts traded, while revenue measures what an operator actually earns. The two metrics are therefore not directly comparable. Still, the figures suggest that prediction markets are capturing an increasing number of users.

Revenue reports, such as those from AGA and NIGC, cannot measure betting activity that may have shifted from licensed sportsbooks to federally regulated event contracts. They cannot determine how much faster regulated markets might have grown in the absence of prediction markets, either.

Broader market dynamics also influence sports betting revenue and handle. Following the rapid expansion of legalized sports betting after the 2018 repeal of PASPA, the pace of new state launches has slowed considerably, leaving fewer new markets to drive growth.

Revenue is also affected by sportsbook hold, which can move in the opposite direction of handle as bettor-friendly outcomes reduce operator winnings even when wagering activity remains strong.

Debate Goes Beyond Revenue

Taken together, these limitations mean the latest revenue reports provide only a partial picture of prediction markets’ impact on regulated gaming. Industry groups have argued that the debate extends beyond current revenue performance.

They contend prediction markets create regulatory disparities, reduce potential state tax collections, weaken consumer protections, and, in the case of tribal operators, threaten exclusivity agreements that underpin tribal gaming compacts.

David Bean, chairman of the Indian Gaming Association, has argued that national revenue figures can mask regional differences. Speaking during a recent House Agriculture Subcommittee hearing on prediction markets, he said:

While overall it may have went up, many tribes and different regions are experiencing losses. The increase is nowhere near the explosive increase that we’ve seen in prediction markets in the last 18 months.”

At the same time, the latest commercial, tribal and state-level revenue reports suggest the regulated gaming industry remains resilient while prediction market litigation continues across multiple states.

With key jurisdictional questions remaining unresolved and federal and state courts reaching conflicting conclusions on key legal issues, many industry observers expect the disputes could ultimately reach the U.S. Supreme Court. That leaves the broader regulatory landscape unresolved for the foreseeable future.